EBITDA, exclusive of compensations for long-term contracts (LTCs), reached PLN 2bn and increased by 4.2% y-o-y. EBITDA margin is 30%, which is the best result among the largest companies of the energy sector in Poland and the fourth in Europe.

PGE Capital Group's good results are first of all the effect of streamlining the Group structure carried out last year and of higher revenues from LTC compensations y-o-y.  

- First of all, we are satisfied with the high increase in the net profit attributable to the PGE shareholders. According to our forecasts, streamlining the structure by a buy-out of the minority shares in December last year is starting to generate the expected results, said Mr Tomasz Zadroga, President of PGE Polska Grupa Energetyczna SA.

Net profit and EPS growth

Net profit attributable to equity holders of the parent company  increased by 38% y-o-y in comparison with Q1 2010 and reached PLN 1.2 bn. In the first place, this growth is connected with streamlining the ownership structure in December 2010, when PGE Polska Grupa Energetyczna S.A. acquired from the State Treasury minority shareholdings in the key companies of the PGE Group i.e. in PGE Górnictwo i Energetyka Konwencjonalna S.A., PGE Obrót S.A. and PGE Dystrybucja S.A.

Net earnings per share in the first quarter of 2011 were PLN 0.66 and increased by 26.9% in comparison with the previous year.

Furthermore, during the first quarter of 2011 the revenues from LTC compensations grew from PLN 66m in Q1 2010 to PLN 171m in Q1 2011.

PGE CG's gross profit including the revenues from LTC compensations in Q1 2011 reached PLN 1.6bn. In comparison to Q1 2010 it increased by 14%. 

- It should be noted that EBITDA margin for the first quarter of 2011 compared to other key companies of the energy sector is the highest in Poland and the fourth highest in Europe. Indebtedness remains at the stable low level. The Group results keep growing, and the implemented projects increase its value, said Mr Wojciech Ostrowski, Vice-president of the Management Board of PGE Polska Grupa Energetyczna S.A. for  Finance. 

Change in the electricity trading model exerts a positive influence on sales results In Q1 2011 the Group sold 22.2 TWh of electricity compared to 14.8 TWh in Q1 2010. As a result, the revenues of the PGE Capital Group excluding the compensations from LTC  amounted to PLN 7.1bn and increased by 35.5% y-o-y. A major influence on the increase of the revenues resulted from the change in the electricity trading model i.e. electricity trade at power exchanges.

The PGE Group production in Q1 2011 remained at the stable level and it was 14.1TWh vs. 14 TWh y-o-y.

Progressing investments in new generation powers In Q1 2011 the investments in the PGE Capital Group amounted to PLN 620.3m. The highest expenditures were made in the conventional power generation segment and reached PLN 429.6m. PLN 118m of the amount was used for the new 858MW unit and PLN 100m for modernisation of units 3 - 12 in the Bełchatów Power Plant.

The second highest expenditure segment was distribution. The Q1 expenditures reached PLN 136m and were mainly related to connecting new customers (PLN 70m) and investments in the construction of new power grids (PLN 13m).

The Group consistently conducted activities related to an increase in its generation capacities.

Final bids for the construction of new units 5 and 6 in PGE Opole Power Plant are expected until the end of June 2011.

In PGE Górnictwo i Energetyka Konwencjonalna S.A. Turów Power Plant Branch, the tender procedures for 460 MW unit are underway.

In its nuclear project, PGE Ej 1 Sp. z o.o. opened two important tendering procedures in the first quarter of 2011. One of them concerns the selection of a Technical Advisor for the investment process related to the construction of the first Polish nuclear power plant. The second one is for advisory services to help determine the plant’s location, and environmental impact as well as to obtain the necessary regulatory permits.

The tender procedures were opened by PGE EJ 1 Sp. z o.o. in accordance with the adopted project execution schedule, i.e. the construction of the first two nuclear power plants in Poland with the total capacity of 6000 MW, 3000 MW each.

PGE Group Consolidation Programme, further streamlining and integration of structures Within the next stage of the PGE Group Consolidation Programme, the activities related to the optimization of the operation and an increase in operational and financial efficiency of the segments established after the formal and legal mergers are being continued. The processes of registering the mergers of PGE Elektrownia Opole S.A. with PGE Górnictwo i Energetyka Konwencjonalna S.A. and of Elektrownia Wiatrowa Kamieńsk Sp. z o.o. with PGE Energia Odnawialna S.A. are underway. Within the non-core assets management programme, during Q1 2011 the shares of four companies were sold and the bankruptcy proceedings related to one subsidiary company were terminated. 

More information are available from

Sylwia Filimon

Public Relations Coordinator

Tel. (22) 340 26 69

e-mail: sylwia.filimon@gkpge.pl  

Additional information on PGE S.A. Capital Group:

PGE Polska Grupa Energetyczna S.A. is the largest power engineering company in Poland and one of the largest such companies in Central and Eastern Europe. Thanks to the combination of its own fuel (lignite) resources, power generation and final distribution networks, PGE guarantees a safe and reliable power supply to 5 million households, businesses and institutions. In 2010 the volume of generated electricity reached approx. 53 TWh net. The installed capacity equals 12.2 GW.  

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